I’m a total newbie to real estate investing, I’ve read a lot of books on it, looked at the great info on these and other forums a lot, and I think I need to take the plunge – I can’t be an observer forever. I’m thinking about buying this 3-unit multifamily property:
It clearly needs to be rehabbed prior to renting out. I’ve crunched the #'s every way to sunday and it should work if the cost to rehab it aren’t too high. I know there are a lot of “it depends” here, and I definitely plan on getting it thoroughly inspected and getting a concrete estimate before making an offer. But I was hoping y’all could help me ballpark total rehab costs? Basic renting level, nice but nothing too fancy – exterior, roof, finishings, landscaping, fence, everything basically. Rural California.
I really appreciate the help,
I wish I could give you a good estimate just by looking at pics, but I can’t. Some people on here use an estimate per square foot. I tend to just look at what needs done and I know most materials cost from my local Lowes store. Are you going to do anything yourself or just hire it all out? To start out, I would make a big list of everything you think you need and go price shopping at Lowes or home depot. At least then you’ll have somewhat of an idea if you talk to a potential worker that they’re not trying to gouge you. I would also try to find someone who can do several different things rather than trying to hire out every different specialty. I think you’ll get better pricing like that. Go shopping and see what price and quality level you want for this job. I try to buy the same stuff for each house. I like standardizing as much as I can. If you drove around my town, you would see all of our houses have the same mailbox post and numbers. I tend to use the same off-white paint for all the interiors too.
Figure out things like what type of flooring you want. If there are hardwood floors there you can get them sanded and restained if they’re in decent shape.
So sorry I’m not going to guesstimate an amount, but I think price shopping will help put your mind at ease.
I voted for 100k because I thought it would cost 60k and you’re in California.
You’re in it for 15k in windows and siding, blown in insulation, etc. The rest will be spent indoors. I’d put each on a seperate meter and fix the floor plan of each so they work well and are efficient with space. I assume it’s in a good area, and I’d make the exterior look really top notch, maybe like an old craftsman with some hardipanel siding. Tear out all the trim and carpet, repaint, new cabinets, doors, trim, etc and you’ll spend the other 45k there. Seperate HVAC, water heaters, etc.
It should take two months.
Thanks Justin and Estrogen, I think y’all are right. I had a friend who has some experience with rehabbing do a drive and walk-by and he’s ballparking the job at 80-100K.
Unfortunately it’s irrelevant now b/c this place sold to cash in about 5 minutes flat. It was priced to move. I’m getting the sense that good opportunities like this one don’t pop up too often, and when they do, it’s important to move on them QUICKLY.
Yeah. There’s always competition out there. It’s important to have your ducks in a row so you can pounce when opportunity arises. As I said in another post, we won’t always get every property we want but other deals will come along…sometimes better than the one you were just focused on.
For me, I like to make sure I have financing lined up before making an offer. Some people don’t worry about where the money comes from until it’s under contract. I don’t like searching for the money under time constraints.
Keep at it and find your first investment property!
If you are going to be in the game, you need to know your parameters that you will work under AND you need to be ready to “pull the trigger”…
I got a lot of the properties that I did in Louisiana because I was able to look, make a decision, contract, and close quickly…
Great advice KD and Justin – thanks!
Just don’t get in too much of a hurry and underestimate repairs. I won’t tell you who has done that!
Thanks for that!!
I’m in the middle of my “oops” rehab right now. Looks like I am going to come out ahead but I don’t know by how much.